Winn-Dixie CEO says time is right to sell chain

The sale of the Jacksonville-based grocery chain Winn-Dixie to Bi-Lo, a chain based in Greenville, S.C., will not result in the closing of any Winn-Dixie stores, the companies said in a joint announcement Monday. This Winn-Dixie is on County Road 210 in St. Johns County.

The sale of the Jacksonville-based Winn-Dixie grocery chain to Bi-Lo of Greenville, S.C., was announced Monday. Together, they would operate almost 700 grocery stores in eight states.

Winn-Dixie in Jacksonville

The grocery store chain now known as Winn-Dixie has been headquartered in Jacksonville since 1944, when it was Winn & Lovett. They filed for bankruptcy reorganization in 2005. The company has been publicly held.

Together, Winn-Dixie and Bi-Lo would operate about 690 grocery stores in eight states, employing 63,000 people. Winn-Dixie and Bi-Lo stores would keep their names after the merger.

The closing of the sale will take 60 to 120 days, including a vote by Winn-Dixie shareholders. Company officials say they expect to announce the management team and headquarters before they finalize the deal.

Winn-Dixie employs about 1,100 people at its corporate office off Edgewood Avenue on the Westside. Lynch said he expects the merger will have “minimal impact” on the Jacksonville office.

Jerry Mallot, executive vice president of JAX Chamber, said officials will make the case for Jacksonville being the corporate headquarters.

“We’ll be pursuing this issue aggressively and if there’s an opportunity to make Jacksonville more prominent, we’ll definitely be part of it,” Mallot said.

Bi-Lo Chairman Randall Onstead said regardless of how the new corporate structure is set up and located, the combined companies will maintain “significant presence” in both Jacksonville and Greenville.

“Those are communities we have a lot of investment in and we want to recognize that in being good corporate citizens,” he said.

If Winn-Dixie shareholders approve the sale, they will receive $9.50 in cash per share of common stock, which is 75 percent more than the company’s closing stock price Friday.

Winn-Dixie would become a privately held, wholly-owned subsidiary of Bi-Lo, and its stock would stop trading publicly, according to the announcement.

Lynch said talks about the merger occurred over the past few months among Winn-Dixie, Bi-Lo and Lone Star Funds, a Dallas-based investment firm that is a major financier of the Bi-Lo chain. Lone Star has organized the investment of $24 billion worldwide since 1995, according to the firm.

Lynch said Lone Star is “obviously a very strong backer with a lot of funds. That brings security. They’re also smart businessmen.”

Winn-Dixie and Bi-Lo have faced financial struggles in the hyper-competitive grocery market. Winn-Dixie filed for Chapter 11 bankruptcy in 2005 and emerged in 2006. Bi-Lo went down the bankruptcy path in 2009 and completed its financial restructuring in May 2010.

Onstead said when Bi-Lo’s board began exploring where it could grow, “Winn-Dixie was at the top of the list.” The chains operate in geographic areas that border each other but do not overlap. Together, they will be the nation’s ninth-largest grocery chain, he said.

“You’re talking about two companies that line up well together, that look a lot alike and serve the same kind of customer,” he said.

Winn-Dixie customer Julie Dowdy, 50, said she was sorry to hear the chain is being sold but glad the store’s name won’t change.

“I love this place,” she said when she made her weekly trip to the Fort Caroline Road store in Jacksonville.

Bi-Lo has a Winn-Dixie connection that goes back to its founding in 1961. Former Winn-Dixie executive Frank Outlaw started Bi-Lo when he bought a small chain of grocery stores, according to the company.

Lynch said with almost 700 stores, the merged supermarket chains will be in a stronger position to negotiate lower prices from their vendors, which in turn will make them more competitive with other grocery stores.

“I’ve had lot of conversations with different people about Winn-Dixie” in recent years, he said. “But this one made a lot of sense to me. It’s very logical and it’s the right thing for the company for the future.”

He said it’s too early to discuss what his role might be in a post-merger company.

A fitting end to Winn-Dixie would be to remove their name from the grocery world. After what the management did to the company, and what their ineptness did for their employees is disgraceful. They knew for several years what was going on, hence the prohibition from employees from selling their stock before it tanked and was declared worthless. Yet quite a few higher ups were able to dump their stock.

I talked to a gentlemen who had retired after 30 years from WD. His stock portfolio was worthless, his retiree benefits were in shambles, and he was concerned about what would become of his retiree health insurance. That was several years ago, but I didn't W-D coming to his rescue then, and I don't suspect they ever did. He was literally in tears.

Bi-Lo is well established in Greenville so we would be foolish to think they wouldn't move WD headquarters there. The buy is a good fit for Bi-Lo and makes sense. I do not think it's good for Jacksonville though. It's only good for Bi-Lo.

Plus, Bi-Lo would have to find a way to compete with Publix. WD never could figure that out.

I guess it depends on WD's location - the one at the Beaches is great, as is the one off of US1 not too far from Nocatee.

Publix, as will all stores, designs itself to the market. How upscale can you be in Jacksonville?

I would advise people to think twice about doing their food shopping at Wally-world (and other deep discound places)...any foods that are farmed and imported from China (and the countries around it) should raise red flags to the consumer. The pollutants that are dumped into their seas and land and the lack of oversight in manufacturing certainly gives me pause.

The article says there will be no store closings. To some readers that seems to be proof positive that there will be no store closings. The articles about the NFL franchise state they won't be moving. Some readers cite that as proof positive they won't leave.

The truth is that what the PR statements say is irrelevant.

I wouldn't miss Winn Dixie any more than I would miss the football team. I remember how the Davises propped up crooks like Dale Carson and Ed Austin. Haven't been in a local Winn Dixie since about 1983.